Microsoft's rapid AI progress could give it an edge over Google, the incumbent giant in search.
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Alphabet (Google's parent) and Microsoft, in their earnings calls yesterday after the bell, both focused their discussion on AI and the future of the search. Microsoft, the only company that is integrating AI into Bing's search engine and Office suite, has predicted a dramatic change--"a generations shift," to use Satya Nadella, CEO of Microsoft.
Google, meanwhile, suggested that AI is just one more evolutionary step in its dominance of search. Sundar Pichai said, "As we've evolved Search and gone through many, numerous shifts, we have always taken a grounded approach to how we evolve our ads." "And we do it in a manner that makes sense, and provides value to our users."
Both companies have released numbers that are very telling. Google's revenue in "search" and "other" categories increased by 1.87% on an annual basis, which is a much smaller increase than the 24.3% growth in the same quarter of 2022 or the 30.1% growth in 2021. Nadella also said that the daily downloads of Bing's mobile app had increased four-fold since Microsoft integrated AI capabilities into the browser search functionality.
Microsoft's integration of Open AI, a dialogue-based chatbot, and its investment over the past six months has undoubtedly challenged Google's dominance in search. Bard, Google’s answer to ChatGPT's ChatGPT bot, also didn't start off well.
Analysts appeared to be more convinced by Microsoft's narrative. Microsoft's stock price rose by a higher percentage in premarket trading compared to Alphabet.
Microsoft shares jumped 7.7% in premarket trading after the release of its first-quarter results
Alphabet shares rose by 2%.
Bing Mobile App Installations have increased by 4x since February, when the AI-powered browser was launched.
Microsoft Azure OpenAI, a cloud service augmented with OpenAI, has grown by 10x in the last quarter.
Google's revenue growth from "search and other" in the first three months of the year, which went up from $39.6 to $40.4 billion. This is a much smaller increase than the 25 percent Google experienced in the first third of 2022. Google says that search "performs well" and is showing "resilience."
Microsoft's search and other revenues grew by 3.4% in the past year, reaching just over $3 billion
Google Cloud Services account for 10% of Google's revenues
Microsoft announced the "general availability", on Jan. 16, of its Azure OpenAI Service. This service has been available for a few customers since 2021, when it was first teased. It includes dialogue-based chatbot GPT-3.5, a natural-language-to-code converter called Codex, and DALL*E 2, which can create realistic images and art from a description in natural language.
Microsoft confirms its third multi-billion dollar investment into OpenAI on Jan. 24, 2019. The amount is not disclosed, but according to a Semafor Report it's a staggering $10 billion.
OpenAI claims to have "trained a classification system that can distinguish between texts written by humans and AIs."
Sundar Pichai announces that Alphabet will release Bard powered by LaMDA (Language Model for Dialogue Applications) to "trusted testers" on February 6. The general public is expected to be able use it shortly thereafter.
Microsoft holds a surprise announcement on February 7th to unveil a new version Bing of its search engine, developed in collaboration with OpenAI. The new Bing "runs on a next-generation large langauge model." Microsoft's Yusuf Mehdi is the corporate vice president for consumer marketing and said that Microsoft will unveil a new version of its search engine Bing, developed with OpenAI. The engine is "running on a new next-generation large language model."
Google's Bard unveiling, livestreamed in Paris, is a disappointment after an incorrect description of the AI bot was used in a promotional jingle.
Salesforce and OpenAI announced the integration of ChatGPT in Slack on 7 March. The tool will allow users to quickly find answers, summarize conversations and create messages.
Google announces plans for generative AI to be added to Workspace applications like Gmail and Google Docs.
Microsoft removes its Bing Chat waitlist so that anyone can use the GPT-4 powered chatbot. Microsoft integrates OpenAI technology into Office programs like Word and Excel the next day.
Google announces that it will allow more people to interact and use its new service. Previously, the service was only available to a select group of "trusted test subjects" selected by Google.
18: The US Patent and Trademark office rejects OpenAI's application to apply for trademarks for "GPT", which stands for "Generative Pretrained Transformer." They cite attorneys who failed to pay a fee associated with the petition as well as provide "appropriate documentation supporting justification of special actions."
Bloomberg reveals in a damning report that Google employees who tested Bard used words like "pathological liar", "cringeworthy" and "worse then useless".
Google merges its Brain and DeepMind organizations into one Google DeepMind organisation, according to Pichai. This move will "significantly speed up our progress in AI."
OpenAI Announces "ChatGPT business" coming soon
Amazon Web Services announced on April 4 a 10-week generative AI Accelerator Program that will help the "most promising startups" in the sector by providing cloud credits, mentoring, networking events and more. These startups will be able to pitch investors at the end.
Amazon announced a cloud based service for generative AI called Bedrock nine days later. Bedrock, Amazon's cloud-based generative AI service, will allow customers to "access foundation models" (FMs) from leading AI startups, which they can then customize and integrate into their apps.
Pichai cited the "momentum" in cloud as another driving force for Google's success, along with "search performing very well." Cloud business has been profitable for the very first time after three years of losses.
Microsoft is gaining market share as Amazon Web Services, which was the leader in the industry, falls behind.
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